Department of Trade and Industry
Government envisaged that the three corporate bills awaiting the President’s signature would be in force by the middle of 2010. The minister of trade and industry, Mr Mandisi Mpahlwa, provided the media with an overview of the three key pieces of corporate legislation recently approved by Parliament at a media briefing in Pretoria. Detail was provided on the Competition Amendment Bill, the Companies Bill and the Consumer Protection Bill.
The minister declared that the Competition Amendment Bill was designed to address complex monopolies and cartels that adversely impacted on the prospects for downstream industries and consumer rights. For the first time in South Africa’s legal history, criminal sanctions would be applied against individuals found guilty of price fixing or any other anti-competitive behaviour. A ten-year prison sentence could now be imposed on such individuals.
The Competition Commission would now be empowered to “proactively investigate markets” to uncover uncompetitive practices and protect consumer interests. The minister declared that the Competition Commission would recruit more skilled personnel in the short term to meet the new objectives. The Bill would also stimulate better corporate governance and legal compliance amongst private sector companies.
The Consumer Protection Bill sought to facilitate a strong consumer rights culture and a “fair, efficient and transparent” market. The Bill incorporated the standard international approach to consumer rights to safeguard consumers. Product liability was a core component of the Bill and would apply to producers, suppliers and distributors. Reinvigorated consumer activism would be a major offshoot of the Bill through the accreditation of more consumer groups. According to the minister, well-informed consumers would foster a more competitive and effective economy.
The Companies Bill was the product of five years of extensive consultation with a wide-range of stakeholders. The legislation introduced extensive alterations to the present corporate law framework. Numerous changes to the business context, both local and international, had required an overhaul of the current Companies Act. Mr Mpahlwa gave the assurance that the government would continue with its planned interventions to favourably position local industry for the expected turnaround in the global economy.
A notable addition was the introduction of a business rescue mechanism to be applied to financially distressed companies. The objective was to assist companies to avoid liquidation proceedings. The Bill would also promote shareholder activism and sound financial management.
The minister added that the three pieces of legislation would come into force at the latest by the middle of 2010 although certain provisions might be implemented prior to this in a staggered fashion.